Izvestia: “55 ways of dealing with the crisis”
Vladimir Putin has submitted a detailed plan for supporting the economy
The Russian economy, or rather, some of its branches, are ill and in need of prompt state assistance, the Government House announced. Nonetheless, it is unwise and wasteful to distribute money to all who ask. On Friday, Prime Minister Vladimir Putin approved a plan of action, listing 55 steps to cure the economy of the effects of the global financial crisis.
The ultimate objective is to help the industries and the financial sector regain their footing in the next five months. Industrialists, bankers, farmers, and retail chain owners each have their own agendas, which are being examined by Anastasia Savinykh.
The plan is, on the one hand, very detailed and, on the other, an example of brevity. Everything is precise and to the point: the step concerned, its timeline, and who will complete each step. If anyone previously doubted that the government knew what to do with the crisis, save dispensing money among the needy, these doubts can now be put to rest.
Distribute first and check second
Although the state will never run out of bailout money for companies and banks, the latter should not anticipate endless generosity. One of the first points in Putin's plan is strict control of all the money distributed to banks and companies.
How much to give and to whom? Detailed recommendations will be issued this month, but auto manufacturing, farm machinery, air carriage, and housing construction already take top priority. In order to ensure that banks do not convert all state aid into foreign currency and stash it away for a rainy day, but rather use it to help the companies, the Bank of Russia will appoint a representative to each lending institution.
Support Russian producers
"Buy Russian" must become the principle for federal, regional and municipal authorities, as well as for state corporations and natural monopolies, when they make their purchases. Russian producers will also enjoy price preferences between 5% and 25% when a state order is placed with them; these will be effective through 2010.
Every encouragement will be given to exporting companies. During this and next year, they will receive subsidies to compensate for interest payments on loans. The government also reserves the right to adjust customs duties in case an industry develops problems or faces a cut in imports.
Promote the defence sector
Putin's plan takes particular care of the defence industry. It suggests, for example, that their enterprises issue additional shares and bonds "to be bought by appropriate bodies". That is to say, the authorities are prepared to do all they can to prevent foreign lenders from gaining control over strategic industrial facilities. Even this is not all - the defence industry has been promised investment loans and subsidies to repay interest. If necessary, it will also be given day-to-day financing to keep any defence enterprise going.
Housing issue
The Russian housing market seems to have been the worst hit by the crisis. The plan gives this economic segment particular attention. In 2008-2009, to fulfil its social obligations, the state will buy flats in finished buildings. Unfinished projects will also be purchased, but on the condition that the block is turned over for occupancy within six months of concluding a state contract. In 2009, additional finance will be provided for Russia's Agency for Housing Mortgage Lending, which buys out loans from regional banks.
Individual farmers and small businesses
Putin's plan also provides for increasing, at federal budget expense, the capitalisation of Rosselkhozbank and Rosagroleasing next year, affording individual farmers an additional chance to lease or loan the equipment they need.
The agriculture and related industries are particularly lucky. It is not every day that the authorities promise to subsidise the interest rate at 100% of the Bank of Russia's refinancing rate. Roughly speaking, individual farmers will get their loans for free.
In the sphere of small businesses, the government has announced its readiness to increase budget spending in order to support businessmen.
"No" to unemployment
The Health and Social Development Ministry has been instructed to monitor unemployment growth, but the government has its finger on the pulse and, in case of anything untoward happening, is ready to quickly respond to the situation. "We are prepared to create new jobs," said presidential aide Arkady Dvorkovich, meaning rapid implementation of infrastructure projects.
In addition, the government has agreed to raise the unemployment benefit, which today stands at 3,124 roubles, even further.
